Why Canada Must Double Down on Energy Production

From the Frontier Centre for Public Policy

Must we cancel fossil fuels to save the earth? No.

James Warren, adjunct professor of environmental sociology at the University of Regina said so in a recent paper for the Johnson Shoyama School of Public Policy, a joint effort by his university and the University of Saskatchewan. The title says it all: “Maximizing Canadian oil production and exports over the medium-term could help reduce CO2 emissions for the long-term.”

The professor admits on the face of it, his argument sounds like a “drink your way to sobriety solution.” However, he does make the defensible and factual case, pointing to Canadian oil reserves and a Scandinavian example.

Decades ago, Norway imitated the 1970’s Heritage Fund in Alberta that set aside a designated portion of the government’s petroleum revenues for an investment fund. Unlike Alberta, Norway stuck to that approach. Today, those investments are being used to develop clean energy and offer incentives to buy electric vehicles.

Norway’s two largest oil companies, Aker BP and Equinor ASA have committed $19 billion USD to develop fields in the North and Norwegian Seas. They argue that without this production, Norway would never be able to afford a green transition.

The same could be said for Canada. Warren laid out stats since 2010 that showed Canada’s oil exports contribute an average of 4.7% of the national GDP. Yet, this noteworthy amount is not nearly what it could be.

Had Trans Mountain, Northern Gateway, and Energy East pipelines been up and running at full capacity from 2015 to 2022, Warren estimates Canada would have seen $292 billion Canadian in additional export revenues. Onerous regulations, not diminished demand, are responsible for Canada’s squandered opportunities, Warren argues this must change.

So much more could be said. Southeast Asia still relies heavily on coal-fired power for its emerging industrialization, a source with twice the carbon emission intensity as natural gas. If lower global emissions are the goal, Canadian oil and natural gas exports offer less carbon-intensive options.

China’s greenhouse gas emissions (GHGs) are more than four times what they were in 1990, during which the U.S. has seen its emissions drop. By now, China is responsible for 30% of global emissions, and the U.S. just 11%. Nevertheless, China built 95% of the world’s new coal-fired power plants in 2023. It aims for carbon neutrality by 2060, not 2050, like the rest of the world.

As of 2023, Canada contributes 1.4 percent of global GHGs, the tenth most in the world and the 15th highest per capita. Given its development and resource-based economy, this should be viewed as an impressively low amount, all spread out over a geographically diverse area and cold climate.

This stat also reveals a glaring reality: if Canada was destroyed, and every animal and human died, all industry and vehicles stopped, and every furnace and fire ceased to burn, 98.6% of global greenhouse gas emissions would remain. So for whom, or to what end, should Canada kneecap its energy production and the industry it fuels?

The only ones served by a world of minimal production is a global aristocracy whose hegemony would no longer be threatened by the accumulated wealth and influence of a growing middle class. That aristocracy is the real beneficiary of prevailing climate change narratives on what is happening in our weather, why it is happening, and how best to handle it.

Remember, another warming period occurred 1000 years ago. The Medieval Warming Period took place between 750 and 1350 AD and was warmest from 950 to 1045, affecting Europe, North America, and the North Atlantic. By some estimates, average summer temperatures in England and Central Europe were 0.7-1.4 degrees higher than now.

Was that warming due to SUVs or other man-made activity? No. Did that world collapse in a series of floods, fires, earthquakes, and hurricanes? No, not in Europe at least. Crop yields grew, new cities emerged, alpine tree lines rose, and the European population more than doubled.

If the world warms again, Canada could be a big winner. In May of 2018, Nature.com published a study by Chinese and Canadian academics entitled, Northward shift of the agricultural climate zone under 21st-Century global climate change. If the band of land useful for crops shifts north, Canada would get an additional 3.1 million square kilometers of farmland by 2099.

Other computer models suggest warming temperatures would cause damaging weather. Their accuracy is debatable, but even if we concede their claims, it does not follow that energy production should drop. We would need more resilient housing to handle the storms and we cannot afford them without a robust economy powered by robust energy production. Solar, wind, and geothermal only go so far.

Whether temperatures are warming or not, Canada should continue tapping into the resources she is blessed with. Wealth is a helpful shelter in the storms of life and is no different for the storms of the planet. Canada is sitting on abundant energy and should not let dubious arguments hold back their development.

Lee Harding is Research Fellow for the Frontier Centre for Public Policy.

Related Topics:#FossilFuels #FrontierCentreForPublicPolicy #LeeHarding CanadaEnergyProduction JamesWarren MaximizingCanadianOilProduction

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Published on January 9, 2025

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From Resource Works

By Stewart Muir

There is no “energy transition” – It’s all “energy addition”

Politicians and climate campaigners like to talk of an “energy transition” in which the world is going to burn less and less fossil fuel, switch to clean (or cleaner) energy, and thus resolve climate issues.

But so far the “transition” is not so much about moving away from traditional fuels as about adding renewable energy sources on top of them.

Our latest episode of Power Struggle looks at the impact of world use of coal, which is still a prime source of energy — and growing. That’s bad, we agree, but some uses of coal are going to be hard to change.

Experts have been predicting “peak coal” for years but they’ve always been wrong. This year, global coal consumption is expected to reach an all-time high.

Some key points from our podcast with our Stewart Muir:

The world burns over one million tons of coal every hour. That’s the weight of nearly 5,000 Statues of Liberty or 10 aircraft carriers, or about 247,000 adult African elephants. So make that 37,000 adult African elephants every hour.
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China may have installed more renewable-energy sources, and may lead in electric vehicles, but China’s green-energy business is built on coal.

So, while we hail the energy transition, and applaud solar energy, carbon capture and more, we still need to talk about the 247,000 elephants in the world’s room — coal.

Clearly, without addressing coal’s persistent use, the energy transition will fail.

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Economy

The European Union is shifting back towards fossil fuels

Published on January 9, 2025

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From Resource Works

In 2024, the EU shifted towards a cautious, fossil fuel-inclusive energy strategy amid rising costs and public unrest

In 2024, the European Union’s shift back towards fossil fuels began to solidify in earnest.

Over the past few years, Giorgia Meloni has become the Prime Minister of Italy, Geert Wilders’ party is the senior partner in the governing coalition of the Netherlands, and Friedrich Merz is poised to ascend to the leadership of Germany’s government. All three figures are on the political right and are far more nuanced or sceptical of renewable energy, depending on whom you speak to.

The EU’s once ironclad commitment to rapidly replacing fossil fuels with renewables has cracked and given way to a more cautious and inclusive strategy to keep homes heated and industry powered. There is also growing resistance to the sacrifices being asked of ordinary EU citizens to meet the demands of aggressive green policies, which helped fuel their rise—no pun intended.

Prime Minister Giorgia Meloni of Italy reiterated her government’s ambition for Italy to become a hub of natural gas in Europe. Meloni’s government has signed a important deal with Libya and reaffirmed Italy’s partnership with Algeria across the Mediterranean to grow imports of natural gas to Italy.

Meloni herself has labelled EU climate policies as “disastrous” and has pledged to revise them, while her government has prioritized energy security and economic pragmatism. Her push to boost Mediterranean gas development is in large part a reaction to the Russian invasion of Ukraine in 2022, which led to severe restrictions on imports of Russian gas.

While many critics charge Meloni’s approach to fossil fuels as short-sighted, her approach resonates with many Italians and other Europeans who will no longer tolerate economic disruption due to energy shortages.

In the Netherlands, Geert Wilders’ Party for Freedom (PVV) has been the senior partner in the governing coalition since October 2023 and is far more hawkishly contrarian when it comes to EU climate policies. Wilders has dismissed proposed new investments in offshore wind turbines, solar farms, and other measures as “pointless climate hobbies.”

The PVV’s manifesto proposes abolishing Dutch climate laws, removing the country from the Paris Agreement, and growing fossil fuel extraction in the North Sea. Wilders is likely to face resistance from his more moderate coalition partners, but his electoral success is another indicator that green policies are no longer deal-breakers for European voters.

To the east, in Germany, Friedrich Merz and the Christian Democratic Union (CDU) are heavily favoured to return to power in the 2025 election after just four years out of government.

Merz opposes the EU’s mandated ban on combustion engines by 2035 and is open to reviving nuclear energy, which was controversially phased out under the current Social Democratic Party-led government after pressure from the Green Party, a junior coalition partner. As a junior partner in the current governing coalition, the Greens are unlikely to join a CDU-led government if the party secures a plurality in the upcoming election, as they have never formed a coalition with the CDU before.

Under Merz, the CDU advocates for “technological openness,” which opens the door to a host of alternatives to heavy-handed energy phaseouts. Like Meloni in Italy, Merz remains committed to EU climate goals, but the CDU’s pro-business outlook could very well slow the pace of renewable energy adoption in favour of economic and industrial goals.

Germany has a special role in the EU as the largest economy and has acted as its unofficial leader for decades. The decisions made by a likely Merz-led CDU government will have a huge impact across the bloc, even if his approach may be tempered by his coalition partners.

The approach of Merz, Meloni, and Wilders reflects a broad reorientation in Europe due to rising energy costs, stagnating economies, geopolitical uncertainty, and public backlash.

This shift is not indicative of climate denial or an abandonment of the EU’s commitment to climate neutrality by 2050, but the pathway is far murkier. Global energy leaders should take note and ponder what role they can play with the EU’s more inclusive approach to energy security.